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Media Perspective: Sky faces a battle to keep hold of the jewel in its crown

Sky celebrates its 20th anniversary this week (see feature, page 20) and no doubt has much to cheer. It may face as many challenges as it always has, but, in one area especially, that of sports coverage, and notably football, it has always excelled.

Much of Sky's success stemmed from the stranglehold it maintained for so
long on live coverage of the football Premier League, a deal sealed in
1992 by Rupert Murdoch's then Sky chief executive, Sam Chisholm. Its
intensive coverage brought new content and a nicely packaged male
audience to advertisers - one of whom, Ford, continues to sponsor live
football to this day.

This enabled Sky's ad sales people to turn a mere trickle of revenue
into a tidal wave, making it a serious player for the first time against
the terrestrial channels.

And, to be fair, it earned the right to do this by redefining standards
of live sports coverage and inventing some great programming packages
such as Super Sunday and Monday Night Football that were a marketing
dream (incidentally, Sky Sports News, essentially a football news
channel and one of the best inventions of the modern TV age, celebrated
its tenth anniversary last October).

Times are changing, though, and Sky has long since had to share its live
football with Setanta. This week it retained its rights to show the
majority of Premier League matches but Disney is likely to bid for
secondary rights via its ESPN franchise and Setanta is expected to be in
the hunt once again, putting the pressure on Sky's men with calculators
to deliver.

Sky has retained its key rights this time around (covering seasons 2010
to 2012) with a bid thought to exceed £1 billion. Despite the
downturn it can still afford to do this, not least because of
subscriptions from pubs, which are thought to cover all but £50
million of the current £438 million annual cost to Sky.

But, it's worth saying again, Sky won't have it all its own way in
future. ESPN itself is increasingly looking at Europe as a serious
market and, last weekend, Super Bowl weekend, relaunched its NASN
channel as ESPN America on the Sky and Virgin Media platforms.

If its early branding and coverage is anything to go by, then ESPN means
business, even if US sports are still a niche for most advertisers.

Meanwhile, Sky is increasingly relying on HD content, with sport high up
the list, as it crawls determinedly towards its ten million subscriber
target. But while darts players such as Phil "The Power" Taylor in HD
might be a draw for the dedicated few, football rights, even though
total exclusivity has gone, are vital to Sky and one of its few really
powerful attractions for advertisers.

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